Monthly Archives: February 2011

Britain lures the ultra-richBritain is preparing to change the immigration rules for wealthy non-EU nationals in a bid to lure more foreign cash into the country.

The government is expected to announce changes to investor visas in mid March, which will cut the time high net worth individuals have to spend in the country, beginning April. People who come on the visa will have to spend just six months in the UK, rather than a previous limit of nine. Depending on the amount they invest in Britain, they will be able to qualify for permanent residency in as little as two years and none will be subject to the immigration cap being introduced.

The changes are part of the Conservative-Liberal Democrat strategy to increase foreign investment into the UK, staving off criticisms that tightening up the immigration system will starve the British economy of the much needed funds.

Investment needs

Under the current regulations, investors bringing £1 million into the UK must put at least 75 per cent of it into government bonds or equity, and its likely that the changes will also include requirements on similar investment requirements.

Law firms dealing with high net worth individuals say there has been a surge in interest in an immigration route that has been underused to date. “It’s not about the amount of money they have to invest; these high net worth individuals are short of time, so having to spend nine months a year in the UK, has always been a sticking point,” says Mr Kamal Rahman, immigration specialist and partner at London-based law firm Mishcon de Reya. “If we had reduced this earlier, we’d have had many more people bringing funds in.”

Permanent residency

Since the changes were made, the law firm has received considerable new interest from potential investors in India, and the other BRICS, as well as from North Africa and South-East Asia.

The government will also graduate the time it takes an investor to gain permanent residency based on the size of the investment, replacing the single rule that required all investors to stay for at least five years. Though that rule will be maintained for those bringing in 1 million pounds, people willing to put £5 million into British investments such as government bonds, equity and real estate will qualify for permanent residency in just three years, with those bringing in at least £10 million eligible in two years. While rules for acquiring British citizenship will remain the same for now, the government has indicated that it will be consulting on potential changes to this too.

The investor route has, so far, accounted for a tiny proportion of non-EU migration to the UK. In 2009, just 155 investors entered the UK through that route, bringing with them 280 dependents, according to Home Office figures – a sharp increase on the 45 that used it the year earlier, but still a fraction of what the government believes is the potential 1,000 a year who could enter by that route.

Surge in interest

The tightening up of the British system, over the past couple of years, has led to more interest in this route from high net worth individuals, though the time requirements meant it was often families, rather than the investors themselves who entered the UK, says Ms Ceris Gardner, a partner at law firm Maurice Turnor Gardner. She believes that easing the time requirements will make it more attractive to investors. In the past few weeks, for example, the company has seen a surge in interest from wealthy Egyptians looking for options abroad.

However, Britain’s very reason for relaxing the rules on this new route could play against it when it comes to major investments. Concerns about the British economy could prove a disincentive to potential investors looking at where to put their money. “We have seen a lot of scepticism about the economy,” says Ms Gardner. “People may be willing to bring in a million [pounds] but they balk at the idea of bringing £5 or £10 million into the UK.”

——————————————————————————–

Under the current regulations, investors bringing £1 million into the UK must put at least 75 per cent of it into government bonds or equity.

——————————————————————————–

(This article was written by Vidya Ram, London, Feb 17 and published in the Business Line print edition dated February 18, 2011)

Entreprenuership in the United States is now like World Cup cricket where only a select few get to play, and even fewer get to win. But entrepreneurship in India these days is like street cricket, where anyone can play and win a prize too.
-Gururaj Deshpande, Serial Entrepreneur

English is the de facto national language of India. It is a bitter truth. Many Indians would say that India’s national language is Hindi. They would say it with pride if they are from the north and with a good-natured grouse if they are from the south. But this is a misconception. The fact is that, according to the Indian Constitution, the country does not have a national language.Read Complete Article

LONDON: Even as visa rules for ordinary people are being tightened with an annual cap for non-European Union nationals set to kick in soon, the “super-rich” would be able to literally buy their way into Britain under new plans to attract wealthy investors.

Media reports on Monday said the proposed rules would not only make it easier for the rich to enter Britain but, depending on how much money they bring in, they would be able to obtain British residency rights without going through too many hoops.

Industrialists, willing to invest millions of pounds in Britain, would be required to spend only six months — against nine months under current rules — to qualify for a visa and the waiting time for permanent residency would be “dramatically cut for the wealthiest entrants,” according to The Financial Times.

The newspaper said investors bringing in £10 million would qualify for permanent residency within two years and those with at least £5 million would qualify in three. The “poorest” of them — those investing £1 million — have to wait for five years.

Currently, anyone on an investor visa must stay for at least five years to become eligible for permanent residency.

“Those applying for an entrepreneur visa would also see restrictions eased. It is expected businesses will be allowed to bring in an extra employee from overseas in return for an additional investment of £50,000,” said the report.

The so-called “high net worth individuals” are already exempt from the controversial annual cap which will see visas for skilled workers and students drop sharply as part of the Tory-led government’s plans to reduce annual net migration from “hundreds of thousands” to “tens of thousands.”

WASHINGTON: Hundreds, perhaps thousands, of Indians are sneaking into the United States across the Mexico border in what American authorities are saying is a sudden and unexpected spike in illegal immigration — from a country half way across the world which is said to be in the throes of an economic boom.

More than 1,600 Indians have been caught since the influx began in early 2010, while an undetermined number, perhaps thousands, are believed to have slipped through undetected, according to US border authorities cited in an account by the Center for Investigative Reporting and published by the Los Angeles Times on Sunday.Continue reading →

NEW DELHI: Nearly 7,000 expatriates are caught in a battle between India and the United States over contributions made by their citizens towards provident and pension funds and social security.

The Employees Provident Fund Organization, which handles provident and pension funds for the organized sector employees in India, recently tightened the norms which has resulted in protests from expats, and their employers. Following the amendments, international workers would be permitted to withdraw their accumulated balance only after they turn 58. Though contribution to PF and Employees Pension Scheme (EPS), which amounts to 12% of the monthly pay, was mandated in 2008, withdrawals were permitted at the end of an expat’s employment in India. Now, withdrawals are only permitted in case of permanent and total incapacity to work or in case of those suffering from cancer, leprosy or tuberculosis.

An exemption towards EPFO contribution has only been made in case of employees from countries with which India has signed Social Security Agreements and the list includes three nations-Belgium, France and Germany. For India, this is retaliatory action prompted by the refusal of the US to sign a Totalization Agreement that would make it possible for Indian professionals, several of whom are IT company employees on onsite visits, to get their dues when they finish their employment. In the absence of a Totalization Agreement, the US refused to refund the money deducted from the salaries of Indian professionals towards social security contribution.

Despite the Indian government making a case for a pact for over a decade, the US has refused to sign one saying India does not have a social security system. It has refused to accept the EPF or even the New Pension Scheme as one. In the absence of an agreement, Indians working in the US have complained for years that they are losing significant amounts. Continue reading →